The instructions you mention are how to do it. Or, at least how to create the collections on the device.

But, what you use for setting those collections is up to you. You can use any column or combination of columns that are in your calibre library. A collection will be created for each value in the columns. Or, in the case of tag-like columns, each tag. Just choose the ones that suit you. Or create another that produces the values you want.

And no, the collection column in the details list is read-only for the Kobo devices. It shows what collections are on the device but isn't used to set them.

Doesn't "creating collections" means creating the categories? How do I put the books IN the categories?

Or you mean a different thing and I am getting lost in the lingo

Yes, I think you are getting lost on the language. Or, you are over-thinking it.

The KoboTouch driver creates a collections on the device based on the columns specified in the configuration. If you use the series column, it will create a collection for each series and put the books that have that series into the collection. If you use tags, it creates a collection for each tag and the books are assigned to the collections based on the tags. Or you can use a custom column.

What that means is that you just make sure the metadata in calibre is how you want it, and configure the driver to use the columns you want. Then, connect the device and the driver will do the work.

The best thing is to try it and see. Configure the driver with a column and see what happens. You can always change the configuration later and let the driver redo the collections.